FedEx is poised to make its official €4.4 billion offer for TNT by tomorrow (June 30) and could receive European Commission clearance for the acquisition by August 3.
The US company announced on Friday that it has submitted the required filing to the European Commission "to obtain regulatory clearance in connection with the intended recommended public cash offer for all issued and outstanding ordinary shares in the capital of TNT Express".
The European Commission's Competition directorate, which normally takes 25 working days for a preliminary review, published a provisional deadline of August 3 to decide on the filing. However, this can be extended if necessary to review competition issues in depth.
Earlier this month, FedEx’s Executive Vice President and chief legal officer Christine Richards told analysts on the company’s Q4 results call: “We do not believe this transaction faces any competition issues for the Commission.”
The main issue for Brussels will be the sale of TNT Airways to an EU-based owner in order for the airline to remain a European carrier. The business overlap between TNT and FedEx in Europe is not seen as significant enough to require major disposals on either side.
In 2013, the European Commission blocked UPS’ planned takeover of TNT due to serious concerns that the deal would effectively create a ‘duopoly’ in the European international express market, with UPS/TNT and DHL Express being far larger than FedEx. In contrast, the acquisition of TNT will make FedEx into a strong third player in Europe in competition with DHL Express and UPS, above all in the international express market.
Meanwhile, FedEx also said on Friday that it expects to submit a request for review and approval of its Offer Document with the Netherlands Authority for the Financial Markets (Stichting Autoriteit Financiële Markten, AFM) before 30 June 2015, as required under Dutch law.
Under the agreed deal announced on April 7, FedEx will pay €8 per share for all TNT shares, valuing the Dutch company at around €4.4 billion. TNT’s board has recommended that shareholders accept the offer, and the largest shareholder, PostNL, has committed itself to sell its remaining 14.7% stake in TNT to FedEx.
“Based on the required steps and subject to the necessary approvals, closing of the offer is anticipated in the first half of calendar year 2016,” FedEx stated.
